Over half of private equity executives (59 per cent) are expecting to increase their investment activity next year, according to a poll by KPMG.
Thirty three per cent believed it would remain about the same, while only eight per cent said they expect to decrease investing activity.
The poll was taken at the Dow Jones Private Equity Analyst Conference, held last month in New York and sponsored by KPMG.
"There is a great deal of uncertainty in the market place and some participants may be waiting on the sidelines, even though we saw a number of large PE transactions announced during the third quarter,” says Marc B Moyers, national sector leader for KPMG Private Equity. "Fundraising has picked up in the last quarter, debt is available to finance transactions, and covenant terms are reasonable."
Fifty three per cent of respondents reported they expected fundraising to increase over the next year, while 14 per cent said they thought it would decrease and 33 per cent said they expected it to stay the same.
When asked about the most challenging issue facing private equity, 23 per cent said "identifying quality investment opportunities." The same percentage indicated that "the tough IPO market/exits" was most challenging, followed by geo-political concerns and the image of the PE industry, each at 16 per cent.
"Some in the PE industry may be concerned about dealing with the new regulatory environment, such as the new reporting requirements mandated by FATCA," says Glenn Mincey, KPMG’s national tax leader for PE, referring to the Foreign Account Tax Compliance Act. "Many investors are hindered by the sheer volume of regulatory compliance as well as the lack of certainty."
